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How to deal with asset being seized under securitization
02-Jun-2023 (In Property Law)
I have guranteed my assest to the loan took by my friend. I taught he will repay it. But after few months he defaulted the loan without paying loan EMI and he has left from his place. I dont know where he is. He went and hide in some place. Now bank had sent me continues notices and took away my property saying that i should repay the loan and kept my asset for sale. So please advice me what to do legally. What are my rights. What should i do first.
Under section 128 of Indian contract act, liability of principal debtor is co extensive with that of guarantor. The creditor has a right to obtain a decree against the surety and the principal debtor. "The surety has no right to restrain execution of the decree against him until the creditor has exhausted his remedy against the principal debtor since it is the business of the surety/ guarantor to see whether the principal debtor has paid or not. Since your friend has absconded the lender can proceed against you to recover the amount taken by your friend with interest. You can repay the loan amount and then proceed legally against your friend by filing a FIR in the nearest Police Station. The surety after making the payment to the creditor will step into the shoes of the creditor, surety has got a right to recover the amount which he has paid to the creditor. It may include the principal amount, it may include the interest and it may include the cost also.
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Adv. Siddhant Sharma
Delhi | 500+ Answers
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